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Biotech / Medical : GUMM - Eliminate the Common Cold
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To: Mad2 who wrote (3854)5/31/2001 1:23:50 AM
From: Mike M  Read Replies (1) of 5582
 
I doubt that wrigley bought the operation for their "manufacturing", maybe formuls and niche potential.


They bought the company for plenty of reasons but manufacturing was certainly one of them. Of course the plant is a loser if sales are $500K a quarter. You can't operate a plant at less than 10% capacity and expect a profit. Wrigley's own functional products will immediately boost production to profitability as will P&G's demand.

I don't agree with Dan that Wrigley is not interested in nicotine gum. I suspect that SWMAY's problem with the sale is not that Wrigley will make their gum, which it will, but that Wrigley is a potential (perhaps likely) competitor. I think the other problem is that $25M gives GUMM one heck of a lot less dependence on SWMAY.

GUMM's IP will be used in making nicotine gum somewhere. If SWMAY's paranoia doesn't gum things up it will be in the existing jv and will be manufactured, at least initially, by Wrigley at the plant in Phoenix with Gary Kehoe at the controls.
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